The yen fell to a three-month low against the dollar before reports this week that may show Japan's recession is deepening, reducing the allure of the currency as a refuge from the global financial turmoil, Bloomberg reported.
Japan's currency also declined versus the euro before data tomorrow economists say will show unemployment rose to a three- year high and the nation slipped into deflation for the first time since September 2007. The dollar gained for a fourth day against the yen before a U.S. report that may show durable goods orders fell, spurring demand for the world's reserve currency.
"The fundamentals are for the downside to the yen so weaker economic data tomorrow will support the weakening trend," said Satoru Ogasawara, a foreign-exchange analyst and economist in Tokyo at Credit Suisse Group AG. The yen may decline to 100 per dollar by the end of March, he said.
The yen fell to 97.77 against the dollar as of 10:46 a.m. in Tokyo from 97.39 yen late in New York yesterday. It reached 97.88 today, the weakest level since Nov. 14. It dropped to 124.55 per euro from 123.92 yesterday, when it touched 125.15, the lowest since Jan. 9.
The dollar declined to $1.2740 per euro from $1.2723 in New York yesterday. It slipped to $1.4272 versus the British pound from $1.4201, and traded at 1.1693 Swiss francs from 1.1699.
Asian stocks rose, with the Nikkei 225 Stock Average advancing 1.1 percent and the MSCI Asia Pacific Index gaining 1.8 percent.
Japan's currency is poised for its worst month versus the euro since December 2000 on concern the jobs and inflation reports tomorrow will add to signs the slump in the world's second-largest economy is worsening.
Japanese consumer prices, excluding fresh food, fell 0.1 percent in January from a year earlier, the first decline in more than a year, according to a Bloomberg News survey. The unemployment rate probably rose to 4.6 percent last month, the highest since February 2005, a separate survey showed.
The dollar is headed for its best month against the yen since August 1995 before the Commerce Department report that may show orders for U.S. durable goods fell 2.5 percent in January, the sixth month of declines, according to a Bloomberg News survey. The report is due at 8:30 a.m. today in Washington.
"Investors are still very worried about the global outlook," said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. "We suspect the dollar will remain the 'safe-haven' currency of choice in coming weeks."
...